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Your firm needs a machine which costs $180,000, and requires $33,000 in maintenance for each year of its 3 year life. After 3 years, this

Your firm needs a machine which costs $180,000, and requires $33,000 in maintenance for each year of its 3 year life. After 3 years, this machine will be replaced. The machine falls into the MACRS 3-year class life category. Assume a tax rate of 21% and a discount rate of 13%. What is the depreciation tax shield for this project in year 3?

$26,658

$5,598.18

$21,060

$3,465.54

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